70% Of Jamaica Could Adopt CDBC In 5 Years• January 23, 2022 2:34 pm • Comments
Earlier this month, the country of Jamaica finished its completed its first pilot test using a central bank digital currency making this successful pilot a hot topic.
Andrew Holness, the country’s prime minister, stated that these results help indicate that about 70% of Jamaica could possibly be utilizing CDBCs within a five year time frame.
Benefits of the technology included reducing banking costs and having more transparency on where the financial resources are going within the country.
The increased transparency is due to the fact the CDBCs are easier to track due to public resources tracking which forces the government to be more accountable to use the resources for the benefit of the people.
The government is now planning to start a nationwide CDBC launch sometime in the first quarter of 2022 and is currently brainstorming on ideas on how to make this new digital currency accessible to everyone.
Use of this would essentially require mass availability of internet connected devices and the internet in general which is something that a lot of emerging countries are still struggling with.
— Kedrick Spain (@EnSabahNur_1054) January 4, 2022
The Bank of Jamaica, the country’s central bank, has become a pioneer in CBDC efforts with one of the first completed nationwide pilot projects in the world.
After partnering with the Irish cryptography firm eCurrency Mint in March 2021, the central bank has conducted an eight-month-long pilot.
As Cointelegraph reported, the bank has minted 230 million Jamaican dollars (JMD) ($1.5 million) worth of the CBDC for issuance to deposit-taking institutions and authorized payment service providers.
BoJ then issued 1 million JMD ($6,500) in CBDC to the staff at BoJ’s banking department and another 5 million JMD ($32,000) to the National Commercial Bank, a major financial institution in the country.
BoJ aims to add two new wallet providers for its CBDC, followed by a nationwide rollout in the first quarter of this year.
The central bank also plans to focus on interoperability by testing transactions between customers of different wallet providers.
Going into the details of the pilot, many of the participants were small merchants and regular consumers.
The customers typically conducted in-person payment transactions with the merchants to purchase goods and services such as buying local craft jewelry, footwear designers, and garments.
The total supply of CDBCs was worth around 1 million Jamaican dollars which was distributed for testing.
Additional wallet providers within the country are also conducting their own virtual simulation testing and will be getting additional CDBCs to continue further testing the applicability of CDBCs in actual environments.
Currently, Jamaica is only one country out of a long list of nations that are exploring the use of CDBCs, but it is one of the earliest countries that may be able to achieve widespread adoption in a few years due to successful pilots this year.
CBDCs are digital currencies issued as legal tender by a country’s main bank, such as Sweden’s e-krona and China’s digital yuan.
So far about 90 countries are exploring their own digital currencies, and 14, including major economies like China and South Korea, are in the pilot stage, according to a tracker by the Atlantic Council.
Despite their similar status to cryptocurrencies as digital assets, experts have pointed that CBDCs are more centralised as opposed to virtual currencies like bitcoin whose basic feature is to be a decentralised asset for monetary transactions.
The BOJ intends to introduce CBDC in early 2022. On August 9th, 2021, the Bank of Jamaica reached a major milestone and created history by minting Jamaica’s first batch of CDBC.
— PROVEN (@weareproven) September 9, 2021
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